For years, customer loyalty in retail was synonymous with points-based cards, discount vouchers, and generic offers. But the pandemic disrupted everything. Consumer priorities shifted, digital channels surged, and expectations for personalisation reached unprecedented heights.
In the new world that’s emerged, traditional loyalty schemes have begun to feel outdated and ineffective. Today, retailers must remain on high alert as to what loyalty really means and how to build it at a time when trust, value, and experience matter more than ever, but have never been harder to establish.
The loyalty hangover: What’s no longer working
While many retailers have revived their pre-COVID loyalty programs, customer engagement remains lacklustre. According to McKinsey, around two-thirds of established loyalty programs fail to deliver value, with many even eroding it.
At the heart of the problem is that most schemes still reward transactions rather than relationships. However, customers today are not the same as they were even five years ago. They are more discerning, more digitally empowered, and less swayed by shallow incentives. As such, retailers clinging to outdated models are seeing their returns diminish.
In this increasingly unforgiving new reality, loyalty must be earned, not bought. That means shifting from discount-driven mechanics to value-added engagement that speaks directly to customer needs and behaviours.
A new definition of loyalty
Loyalty today is less about points and more about how customers feel. It’s emotional as well as transactional. Research by Deloitte shows that 73% of consumers believe personalized experiences or rewards are important features in a program. However, only 60% claimed to be satisfied with the customised and targeted experiences currently offered.
Deloitte’s insight demonstrates that a more data-driven, personalised, and omnichannel approach to customer engagement is needed if the objective is to achieve long-term, repeat custom.
Indeed, loyalty today is cultivated though a combination of the predictive and the personal while being integrated and transparent:
- Predictive: Anticipating customer needs before they’re expressed.
- Personal: Tailoring offers, content, and interactions based on established behaviours and preferences.
- Integrated: Consistent experiences across in-store, online, and mobile.
- Transparent: Customers are provided with clear value in exchange for their data.
Retailers leading the way
Forward-thinking brands are already resetting their loyalty strategies. Boots Advantage Card has evolved to include personalised offers and health rewards. Sephora’s Beauty Insider program integrates tailored recommendations with exclusive access. Starbucks Rewards now drives 57% of US store sales via loyalty members, leveraging app-based convenience and personalised rewards.
These examples show that loyalty programs can still be powerful, but only when built around relevance, trust, and customer-centric design.
Getting loyalty right
Transforming a loyalty strategy is complex. It requires deep understanding of customer behaviour, strong data infrastructure, and the ability to align internal teams around a clear vision. This is where trusted retail consultants come in.
By helping clients audit and assess their current loyalty programs, the right consultancy will help your business design end-to-end strategies aligned with commercial goals, explore technology options from CRM to UX, and develop measurable KPIs to track success.
At Piran, our approach is pragmatic and results-driven. We work with clients to develop solutions that fit their customers, their infrastructure, and their commercial objectives.
What success looks like
Retailers who modernise their loyalty approach can expect improved customer lifetime value, greater engagement frequency, stronger retention and advocacy, and richer first-party data.
The post-pandemic customer isn’t looking for another plastic card. They want meaningful experiences, personalised value, and consistent recognition across every touchpoint. Loyalty hasn’t died; it’s just been reborn.
Now is the time to act
Loyalty can no longer be viewed as a bolt-on program. Retail businesses that are getting it right see it as a core lever of customer strategy. As the market recalibrates after years of upheaval, retailers investing in smarter, more human-centred loyalty solutions will be best placed to grow sustainably.
Piran Partners is here to guide you through the reset with strategic clarity, practical insight, and a deep understanding of what drives customer connection in the modern era.